By: Barbara Zigah
In Asian trading today, the common currency Euro rose to its highest price in almost three months against the safe haven U.S. Dollar on renewed investor risk appetite. As reported at 2:42 p.m. (JST) in Tokyo, the Euro traded against the U.S. Dollar at $1.3862, the highest trade since last November, with the common currency benefiting greatly from increasing expectations of an interest rate hike in the Eurozone.
Also helping the higher risk currencies was the recent release of key economic data which showed robust factory production growth in China and the U.K. One currency strategist in New York suggests that if the global markets continue to stabilize, and provided that the turmoil in Egypt does not get worse, the greenback will continue to slip lower. Currently, the U.S. Dollar Index, a measure of the greenback’s strength versus a basket of major currencies, fell to 76.931 .DXY.
Most analysts expect to see more Euro buying, in spite of the recent worries over sovereign debt in the Eurozone, and ahead of this week’s policymaker meeting of the European Central Bank. Jean-Claude Trichet, the president of the ECB, will hold a press conference at the conclusion of the meeting, and many expect him to take a hard line on tackling inflationary pressures.